Technical topics regarding tax preparation.
Step up in Basis for Partnership
taxpayer and spouse are equal owners in rental property partnership LLC
member shares held in a revocable trust
taxpayer dies during the year,,, wife inherits through the revocable trust.. it remains in the revocable trust and it remains a disregarded entity for tax purposes
no longer a partnership LLC (now a one member- spouse) and must be reported on personal schedule E, form 1040 for the after death period... and a short year partnership year from 1/1/18-date of death. Then it all gets reported on spouses schedule E.
Spouse should get a step up in basis......We are assuming that step up ends up in her depreciable basis on the rental property on her Sch E.
Yes to step up. Yes to depreciable. Makes sure to separate step up in land (non-depreciable), and step up in Building(depreciable). You will want client to get support for the stepped up value (appraisal, etc), and remember the step up is only for 50% of the property, and not 100%.
the partnership is an LLC.... is the 1/2 step up in basis the surviving spouse's basis in the LLC itself = outside basis
or the underlying asset, depreciable building, which will now be reported as a sole member LLC rental on 1040, Schedule E?
is the 1/2 step up in basis to the surviving spouse at the LLC level = outside basis
or to the underlying rental real estate itself which will now be reported as a sole member LLC on form 1040, Schedule E..
with new 40 year life and no accumulated depreciation?
It would be on the Schedule E as a depreciable asset with the other rental property items.
Powered by phpBB © phpBB Group.
phpBB Mobile / SEO by Artodia.